LeapFrog 2011 Annual Report Download - page 182

Board may provide for or, subject to such terms and conditions as the Board may specify, may permit a
Participant to elect for, the payment of any Performance Cash Award to be deferred to a specified date or
event. The Committee may specify the form of payment of Performance Cash Awards, which may be
cash or other property, or may provide for a Participant to have the option for his or her Performance
Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in cash or
other property.
(iii) Board Discretion. The Board retains the discretion to reduce or eliminate the compensation
or economic benefit due upon attainment of Performance Goals and to define the manner of calculating
the Performance Criteria it selects to use for a Performance Period.
(iv) Section 162(m) Compliance. Unless otherwise permitted in compliance with the
requirements of Section 162(m) of the Code with respect to an Award intended to qualify as
‘‘performance-based compensation’’ thereunder, the Committee shall establish the Performance Goals
applicable to, and the formula for calculating the amount payable under, the Award no later than the
earlier of (a) the date ninety (90) days after the commencement of the applicable Performance Period, or
(b) the date on which twenty-five percent (25%) of the Performance Period has elapsed, and in either
event at a time when the achievement of the applicable Performance Goals remains substantially
uncertain. Prior to the payment of any compensation under an Award intended to qualify as
‘‘performance-based compensation’’ under Section 162(m) of the Code, the Committee shall certify the
extent to which any Performance Goals and any other material terms under such Award have been
satisfied (other than in cases where such relate solely to the increase in the value of the Class A Common
Stock). Notwithstanding satisfaction of any completion of any Performance Goals, to the extent specified
at the time of grant of an Award to ‘‘covered employees’’ within the meaning of Section 162(m) of the
Code, the number of shares of Class A Common Stock, Options, cash or other benefits granted, issued,
retainable and/or vested under an Award on account of satisfaction of such Performance Goals may be
reduced by the Committee on the basis of such further considerations as the Committee, in its sole
discretion, shall determine.
(d) Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or
otherwise based on, Class A Common Stock, including the appreciation in value thereof (e.g., options or stock
rights with an exercise price or strike price less than 100% of the Fair Market Value of the Class A Common
Stock at the time of grant) may be granted either alone or in addition to Stock Awards provided for under
Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan, the Board shall
have sole and complete authority to determine the persons to whom and the time or times at which such Other
Stock Awards will be granted, the number of shares of Class A Common Stock (or the cash equivalent
thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other
Stock Awards.
7. COVENANTS OF THE COMPANY.
(a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep available
at all times the number of shares of Class A Common Stock reasonably required to satisfy such Stock Awards.
(b) Securities Law Compliance. The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to
issue and sell shares of Class A Common Stock upon exercise of the Stock Awards; provided, however, that
this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award
or any Class A Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or agency the authority that
counsel for the Company deems necessary for the lawful issuance and sale of Class A Common Stock under
the Plan, the Company shall be relieved from any liability for failure to issue and sell Class A Common Stock
upon exercise of such Stock Awards unless and until such authority is obtained. A Participant shall not be
eligible for the grant of a Stock Award or the subsequent issuance of Class A Common Stock pursuant to the
Stock Award if such grant or issuance would be in violation of any applicable securities law.
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